Financial Markets and Real Ecinomy: Four Essays in International Trade

Financial markets play an important role in an economy performing various functions like mobilizing and pooling savings, producing information about investment opportunities, screening and monitoring investments, implementation of corporate governance, diversification and management of risk. These functions influence saving rates, investment decisions, technological innovation and, therefore, have important implications for welfare. In my PhD dissertation I examine the interplay of financial and product markets by looking at different channels through which financial markets may influence an economy.My dissertation consists of four chapters. The first chapter is a co-authored work with Martin Strieborny, a PhD student from the University of Lausanne. The second chapter is a co-authored work with Melise Jaud, a PhD student from the Paris School of Economics. The third chapter is co-authored with both Melise Jaud and Martin Strieborny. The last chapter of my PhD dissertation is a single author paper.Chapter 1 of my PhD thesis analyzes the effect of financial development on growth of contract intensive industries. These industries intensively use intermediate inputs that neither can be sold on organized exchange, nor are reference-priced (Levchenko, 2007; Nunn, 2007). A typical example of a contract intensive industry would be an industry where an upstream supplier has to make investments in order to customize a product for needs of a downstream buyer. After the investment is made and the product is adjusted, the buyer may refuse to meet a commitment and trigger ex post renegotiation. Since the product is customized to the buyer's needs, the supplier cannot sell the product to a different buyer at the original price. This is referred in the literature as the holdup problem. As a consequence, the individually rational suppliers will underinvest into relationship-specific assets, hurting the downstream firms with negative consequences for aggregate growth. The standard way to mitigate the hold up problem is to write a binding contract and to rely on the legal enforcement by the state. However, even the most effective contract enforcement might fail to protect the supplier in tough times when the buyer lacks a reliable source of external financing. This suggests the potential role of financial intermediaries, banks in particular, in mitigating the incomplete contract problem. First, financial products like letters of credit and letters of guarantee can substantially decrease a risk and transaction costs of parties. Second, a bank loan can serve as a signal about a buyer's true financial situation, an upstream firm will be more willing undertake relationship-specific investment knowing that the business partner is creditworthy and will abstain from myopic behavior (Fama, 1985; von Thadden, 1995). Therefore, a well-developed financial (especially banking) system should disproportionately benefit contract intensive industries.The empirical test confirms this hypothesis. Indeed, contract intensive industries seem to grow faster in countries with a well developed financial system. Furthermore, this effect comes from a more developed banking sector rather than from a deeper stock market. These results are reaffirmed examining the effect of US bank deregulation on the growth of contract intensive industries in different states. Beyond an overall pro-growth effect, the bank deregulation seems to disproportionately benefit the industries requiring relationship-specific investments from their suppliers.Chapter 2 of my PhD focuses on the role of the financial sector in promoting exports of developing countries. In particular, it investigates how credit constraints affect the ability of firms operating in agri-food sectors of developing countries to keep exporting to foreign markets.Trade in high-value agri-food products from developing countries has expanded enormously over the last two decades offering opportunities for development. However, trade in agri-food is governed by a growing array of standards. Sanitary and Phytosanitary standards (SPS) and technical regulations impose additional sunk, fixed and operating costs along the firms' export life. Such costs may be detrimental to firms' survival, "pricing out" producers that cannot comply. The existence of these costs suggests a potential role of credit constraints in shaping the duration of trade relationships on foreign markets. A well-developed financial system provides the funds to exporters necessary to adjust production processes in order to meet quality and quantity requirements in foreign markets and to maintain long-standing trade relationships. The products with higher needs for financing should benefit the most from a well functioning financial system. This differential effect calls for a difference-in-difference approach initially proposed by Rajan and Zingales (1998). As a proxy for demand for financing of agri-food products, the sanitary risk index developed by Jaud et al. (2009) is used. The empirical literature on standards and norms show high costs of compliance, both variable and fixed, for high-value food products (Garcia-Martinez and Poole, 2004; Maskus et al., 2005). The sanitary risk index reflects the propensity of products to fail health and safety controls on the European Union (EU) market. Given the high costs of compliance, the sanitary risk index captures the demand for external financing to comply with such regulations.The prediction is empirically tested examining the export survival of different agri-food products from firms operating in Ghana, Mali, Malawi, Senegal and Tanzania. The results suggest that agri-food products that require more financing to keep up with food safety regulation of the destination market, indeed sustain longer in foreign market, when they are exported from countries with better developed financial markets.Chapter 3 analyzes the link between financial markets and efficiency of resource allocation in an economy. Producing and exporting products inconsistent with a country's factor endowments constitutes a serious misallocation of funds, which undermines competitiveness of the economy and inhibits its long term growth. In this chapter, inefficient exporting patterns are analyzed through the lens of the agency theories from the corporate finance literature. Managers may pursue projects with negative net present values because their perquisites or even their job might depend on them. Exporting activities are particularly prone to this problem. Business related to foreign markets involves both high levels of additional spending and strong incentives for managers to overinvest. Rational managers might have incentives to push for exports that use country's scarce factors which is suboptimal from a social point of view. Export subsidies might further skew the incentives towards inefficient exporting. Management can divert the export subsidies into investments promoting inefficient exporting.Corporate finance literature stresses the disciplining role of outside debt in counteracting the internal pressures to divert such "free cash flow" into unprofitable investments. Managers can lose both their reputation and the control of "their" firm if the unpaid external debt triggers a bankruptcy procedure. The threat of possible failure to satisfy debt service payments pushes the managers toward an efficient use of available resources (Jensen, 1986; Stulz, 1990; Hart and Moore, 1995). The main sources of debt financing in the most countries are banks. The disciplining role of banks might be especially important in the countries suffering from insufficient judicial quality. Banks, in pursuing their rights, rely on comparatively simple legal interventions that can be implemented even by mediocre courts. In addition to their disciplining role, banks can promote efficient exporting patterns in a more direct way by relaxing credit constraints of producers, through screening, identifying and investing in the most profitable investment projects. Therefore, a well-developed domestic financial system, and particular banking system, would help to push a country's exports towards products congruent with its comparative advantage.This prediction is tested looking at the survival of different product categories exported to US market. Products are identified according to the Euclidian distance between their revealed factor intensity and the country's factor endowments. The results suggest that products suffering from a comparative disadvantage (labour-intensive products from capital-abundant countries) survive less on the competitive US market. This pattern is stronger if the exporting country has a well-developed banking system. Thus, a strong banking sector promotes exports consistent with a country comparative advantage.Chapter 4 of my PhD thesis further examines the role of financial markets in fostering efficient resource allocation in an economy. In particular, the allocative efficiency hypothesis is investigated in the context of equity market liberalization.Many empirical studies document a positive and significant effect of financial liberalization on growth (Levchenko et al. 2009; Quinn and Toyoda 2009; Bekaert et al., 2005). However, the decrease in the cost of capital and the associated growth in investment appears rather modest in comparison to the large GDP growth effect (Bekaert and Harvey, 2005; Henry, 2000, 2003). Therefore, financial liberalization may have a positive impact on growth through its effect on the allocation of funds across firms and sectors.Free access to international capital markets allows the largest and most profitable domestic firms to borrow funds in foreign markets (Rajan and Zingales, 2003). As domestic banks loose some of their best clients, they reoptimize their lending practices seeking new clients among small and younger industrial firms. These firms are likely to be more risky than large and established companies. Screening of customers becomes prevalent as the return to screening rises. Banks, ceteris paribus, tend to focus on firms operating in comparative-advantage sectors because they are better risks. Firms in comparative-disadvantage sectors finding it harder to finance their entry into or survival in export markets either exit or refrain from entering export markets. On aggregate, one should therefore expect to see less entry, more exit, and shorter survival on export markets in those sectors after financial liberalization.The paper investigates the effect of financial liberalization on a country's export pattern by comparing the dynamics of entry and exit of different products in a country export portfolio before and after financial liberalization.The results suggest that products that lie far from the country's comparative advantage set tend to disappear relatively faster from the country's export portfolio following the liberalization of financial markets. In other words, financial liberalization tends to rebalance the composition of a country's export portfolio towards the products that intensively use the economy's abundant factors.

La "guerre des talents" est-elle perdue d'avance? Attirer et fidéliser les salariés par les valeurs du service public

L'idée selon laquelle les organisations productives se trouvent en concurrence pour attirer à elles les meilleurs salariés est aujourd'hui très largement répandue, que ce soit parmi les dirigeants, dans la presse, ou même dans les manuels de management. Dès lors, la guerre des talents paraît inéluctable. C'est oublier toutefois que les salariés, qu'ils travaillent dans le secteur public ou privé par ailleurs, ne sont pas uniquement mus par des considérations utilitaristes, rationnelles et matérielles. Ils ne visent pas avant tout à vendre leurs talents, pour autant qu'ils soient conscients qu'ils en possèdent, mais plutôt à travailler dans un environnement organisationnel en accord avec les valeurs auxquelles ils croient et auxquelles ils sont attachés. Les aspects matériels du travail ont de l'importance, à n'en pas douter, mais les dimensions idéelles et valorielles ont souvent été sous-estimées dans la littérature scientifique contemporaine. Cet article a pour ambition de montrer que les valeurs doivent être réintroduites dans l'analyse des processus motivationnels des salariés. Grâce à la notion de « motivation à l'égard du service public » (MSP) nous montrons que les agents publics sont attachés à des missions, objectifs et valeurs qui définissent en partie leurs activités professionnelles. L'étude empirique se base sur un important échantillon d'agents publics municipaux et cantonaux suisses et analyse les antécédents et les résultats de la MSP. Les enseignements qui en découlent suggèrent que, si guerre des talents il doit y avoir, alors les valeurs compteront elles aussi.

The Impact of Digitization on the Management of Administrative Procedures : The Case of Building Permits

Information and Communication Technologies provide public administrations new ways to meet their users' needs. At the same time, e-Government practices support the public sector in improving the quality of service provision and of its internal operations. In this paper we discuss the impacts of digitization on the management of administrative procedures. The theoretical framework and the research model that we will use in this study help us tackle the question of how digitization transforms administrative procedures as, for example, in terms of time and roles. The multiplicity of institutions involved in issuing building permits led us to consider this administrative procedure as a very interesting case study. An online survey was first addressed to Swiss civil servants to explore the field, and here we present some of its results. We are currently undertaking an in-depth case study of the building permit procedures in three Swiss Cantons, which we will also present in this paper. We will conclude with a discussion and the future steps of this project.

Case management for frequent users of the emergency department: study protocol of a randomised controlled trial.

BACKGROUND: We devised a randomised controlled trial to evaluate the effectiveness and efficiency of an intervention based on case management care for frequent emergency department users. The aim of the intervention is to reduce such patients' emergency department use, to improve their quality of life, and to reduce costs consequent on frequent use. The intervention consists of a combination of comprehensive case management care and standard emergency care. It uses a clinical case management model that is patient-identified, patient-directed, and developed to provide high intensity services. It provides a continuum of hospital- and community-based patient services, which include clinical assessment, outreach referral, and coordination and communication with other service providers. METHODS/DESIGN: We aim to recruit, during the first year of the study, 250 patients who visit the emergency department of the University Hospital of Lausanne, Switzerland. Eligible patients will have visited the emergency department 5 or more times during the previous 12 months. Randomisation of the participants to the intervention or control groups will be computer generated and concealed. The statistician and each patient will be blinded to the patient's allocation. Participants in the intervention group (N = 125), additionally to standard emergency care, will receive case management from a team, 1 (ambulatory care) to 3 (hospitalization) times during their stay and after 1, 3, and 5 months, at their residence, in the hospital or in the ambulatory care setting. In between the consultations provided, the patients will have the opportunity to contact, at any moment, the case management team. Participants in the control group (N = 125) will receive standard emergency care only. Data will be collected at baseline and 2, 5.5, 9, and 12 months later, including: number of emergency department visits, quality of life (EuroQOL and WHOQOL), health services use, and relevant costs. Data on feelings of discrimination and patient's satisfaction will also be collected at the baseline and 12 months later. DISCUSSION: Our study will help to clarify knowledge gaps regarding the positive outcomes (emergency department visits, quality of life, efficiency, and cost-utility) of an intervention based on case management care. TRIAL REGISTRATION: ClinicalTrials.gov Identifier: NCT01934322.

Allergies alimentaires rares [Rare food allergies]

A limited number of foods explain the majority of food allergies. These allergies can be due to a weak allergenicity (garlic, onion, potato), or a weak (or increasing) exposure to emergent food allergens which can be imported (exotic fruits), or recently introduced (lupin, buckwheat, sesame, inulin) or modified by the industry (lysats, lecithins, traces of antibiotics, caseinates, molds, dust mite). Others are in relation with rarer cross-reactivity food allergy syndrome (Apiaceae-Compositae-mugwort syndrome, egg-bird syndrome, cat epithelium-pork meat syndrome). Others are rarely identified, because the food is masked (pepper, basilic). We illustrate rare cases of food allergy and discuss the diagnostic management which is based on a meticulous patient history. Un nombre restreint d'aliments explique la majorité des allergies alimentaires. Les allergies alimentaires rares sont dues à une faible allergénicité (ail, oignon, pomme de terre) ou à une exposition faible ou croissante à des aliments émergents, importés (fruits exotiques), introduits (lupin, sarrasin, sésame, inuline), ou modifiés par l'industrie (lysats, lécithines, traces d'antibiotiques, caséinates, moisissures, acariens). D'autres sont en relation avec des croisements d'allergènes rares (syndrome croisé ombellifères-composées-armoise, syndrome oeuf-oiseau, syndrome épithélium de chat-viande de porc). D'autres enfin sont rarement identifiées, car l'allergène est masqué (poivre, basilic). Nous décrivons des cas rares illustratifs et rappelons la démarche diagnostique qui s'appuie sur une anamnèse minutieuse.

Signalling by the cleaner shrimp Periclimenes longicarpus

Signals increase the fitness of a sender by altering the behaviour of receivers. For cooperative interactions biological market theory proposes that signalling strength may be linked to supply and demand. In this context, a recent laboratory experiment demonstrated that cleaner shrimps may advertise their service to client reef fish and that the advertisement is linked to hunger levels. We investigated signalling by the cleaner shrimp Periclimenes longicarpus in the field to test more detailed predictions of biological market theory. Shrimps often clapped with their pair of claws in response to approaching clients. In line with both theory and the previous study, the probability of clapping increased when the shrimps had been food deprived and clapping shrimps were more likely to clean than nonclapping individuals. However, we found no evidence for the market theory prediction that signalling was targeted specifically to visiting client species with the option to choose other cleaning stations. Instead, shrimps signalled more frequently towards predatory clients than towards nonpredatory clients. We conclude that the signal does not serve primarily to attract the choosy clients but to convey information about identity as preconflict management to avoid predation.

Rewarding civil service performance through team bonuses : findings, analysis and recommendations

Performance-related pay within public organizations is continuing to spread. Although it can help to strengthen an entrepreneurial spirit in civil servants, its implementation is marred by technical, financial, managerial and cultural problems. This article identifies an added problem, namely the contradiction that exists between a managerial discourse that emphasizes the team and collective performance, on the one hand, and the use of appraisal and reward tools that are above all individual, on the other. Based on an empirical survey carried out within Swiss public organizations, the analysis shows that the team is currently rarely taken into account and singles out the principal routes towards an integrated system for the management and rewarding of civil servants.

Production Flow Analysis - cases from manufacturing and service industry

Production flow analysis (PFA) is a well-established methodology used for transforming traditional functional layout into product-oriented layout. The method uses part routings to find natural clusters of workstations forming production cells able to complete parts and components swiftly with simplified material flow. Once implemented, the scheduling system is based on period batch control aiming to establish fixed planning, production and delivery cycles for the whole production unit. PFA is traditionally applied to job-shops with functional layouts, and after reorganization within groups lead times reduce, quality improves and motivation among personnel improves. Several papers have documented this, yet no research has studied its application to service operations management. This paper aims to show that PFA can well be applied not only to job-shop and assembly operations, but also to back-office and service processes with real cases. The cases clearly show that PFA reduces non-value adding operations, introduces flow by evening out bottlenecks and diminishes process variability, all of which contribute to efficient operations management.

From geriatric service to primary care: a retrospective pharmaceutical analysis of the medical prescription

Introduction The population of elderly persons is increasing andnegative outcomes due to polymedication are frequent. Discrepanciesin information about medication are frequent when older persons aretransitioning from hospital to home, increasing the risk of hospitalreadmission. The aims of this study were a) to determine discrepanciesin medical regimen indicated in two official discharge documents(DS = discharge summary, DP=discharge prescription); b) to characterizethe pharmacotherapy prescribed in older patients dischargedfrom a geriatric service.Materials & Methods Elderly patients (N=230) discharged from thegeriatric service (CHUV, Lausanne) over a 6-month period (January toJune 2009) were selected. Community pharmacists compared DS andDP to identify discrepancies including (a) drugs' name; (b) schedule ofadministration, dosage, frequency, prn prescription, treatment durationand galenic formulation. Beers' criteria were applied to identifypotentially inappropriate drugs and a descriptive analysis of drug costs,prescription profiles and generics were also performed.Results On average, patients were 82 ± 7 years old and stayed23.0 ± 11.6 days in the geriatric service. The delay between the datesof patient's discharge with the DP and the sending of the DS to hisgeneral physician averaged 14.0 ± 7.5 days (range 1-55). The DPhad an average of 10.0 ± 3.3 drugs (range 2-19). 77% of patients hadat least one discrepancy. A drug was missing on the DS in 57.8% ofpatients and 19.6% had a missing prn prescription. Among the 2312drugs prescribed, 3% belonged to Beers' list. They were prescribed to61 patients (26.5%), with 6 patients cumulating two Beers' potentiallyinappropriate drugs in their treatment. Analgesics (85% of thepatients), anticoagulants (80%), mineral supplements (77%), laxatives(52%) and antihypertensives (46%) were the drug classes most frequentlyprescribed. Mean costs of treatment as per DP was160.4 ± 179.4 Euros. Generic prescription represented more than 5%of the costs for 3 therapeutic classes (cholesterol-lowering agents(64%), antihypertensives (50%) and antidepressants (47%)).Discussion & Conclusion The high discrepancy rate between medicationlisted in the DP and the DS highlights a need for safetyimprovement. Potential benefits are expected from reinforced pharmacist-physician collaboration in transition from hospital to primarycare. In addition, even though Beers' criteria are questionable, thedrugs prescribed in this already fragile population, and the potentialopportunities of economical optimizations, are advocating thedevelopment and the scientific evaluation of a structured advancedcollaborative pharmacy practice service. This foresees improvedeffectiveness, safety and efficiency in the medication management ofelderly persons.

Respecting the deal: Economically sustainable management of open innovation among co-opeting companies

Platforms like eBay allow product seekers and providers to meet and exchange goods. On eBay, consumers can return a product if it does not correspond to expectations; eBay is the third-party firm in charge of assuring that the agreement among seekers and providers will be respected. Who provides the same service for what concerns open innovation, where specifications might not fully defined? This paper describes the business model of an organizational structure to support the elicitation and respect of agreements among agents, who have conflicting interests but that gain from cooperating together. Extending previous studies, our business model takes into account the economic dimensions concerning the needs of knowledge share and mutual control to allow a third-party to sustainably reinforce trust among untrusted partners and to lower their overall relational risk.

The gender-based stereotype about food is on the table. Food choice also depends on co-eater's gender

Previous research has shown that different foods are stereotypically associated with gender and that eating in a role-congruent way fulfills an impression management function. On the other hand, other studies revealed that adapting one's food consumption to that of the co-eaters is a means to gain social approval as well. In the present study, we bridge these two distinct lines of research by studying what happens when the two norms (conforming to the gender-based stereotype and imitating the co-eater) conflict, that is with opposite-sex co-eaters. Results indicated that the tendency to match the co-eaters' supposed consumption generally appeared over and above one's gender-congruent choice. In addition, as expected, gender differences also emerged: while men were always willing to adapt to the co-eaters, women's intention to eat the feminine food was independent from the co-eaters' gender.

Epidemiology and injury patterns of patients consulting following assault by nightclub security agents in a university hospital emergency service and an associated specialised forensic consultation

Introduction: The Violence Medical Unit (VMU), a specialised forensic medical consultation, was created at the Lausanne university Hospital in 2006. All patients consulting at the ED for interpersonal violencerelated injury are referred to the VMU, which provides forensic documentation of the injury and referral to the relevant community based victim-support organisations within 48 hours of the ED visit. This frees the ED medical staff from forensic injury documentation and legal/social referral, tasks for which they lack both time and training. Among community violence, assaults by nightclub security agents against patrons have increased from 6% to 10% between 2007 and 2009. We set out to characterise the demographics, assault mechanisms, subsequent injuries, prior alcohol intake and ED & VMU costs incurred by this group of patients. Methods: We retrospectively included all patients consulting at the VMU due to assault by nightclub security agents from January 2007 to December 2009. Data was obtained from ED & VMU medical, nursing and administrative records. Results: Our sample included 70 patients, of which 64 were referred by the CHUV ED. The victims were typically young (median age 29) males (93%). 77% of assaults occurred on the weekend between 12 PM and 4 AM, and 73% of the victims were under the influence of alcohol. 83% of the patients were punched, kicked and/or head-butted; 9% had been struck with a blunt instrument. 80% of the injuries were in the head and neck area and 19% of the victims sustained fractures. 21% of the victims were prescribed medical leave. Total ED & VMU costs averaged 1048 SFr. Conclusion: Medical staff treating this population of assault victims must be aware of the assault mechanisms and injury patterns, in particular the high probability of fractures, in order to provide adequate diagnosis and care. Associated inebriation mandates liberal use of radiology, as delayed or missed diagnosis may have medical, medicolegal and legal implications. Emergency medical services play an important role in detecting and reporting of such incidents. Centralised management of the forensic documentation facilitates referral to victim support organisations and epidemiological data collection. Magnitudes and trends of the different types of violence can be determined, and this information can be then impact public safety management policies.

La démarche "Projets de service" aux Hospices cantonaux vaudois

Dans la première partie de ce mémoire, après un bref rappel du contexte institutionnel et des modes de décisions dans l'organisation hospitalière, nous traiterons des nouvelles règles du jeu sanitaire vaudois et nous nous intéresserons en particulier au premier Contrat de Prestations, passé entre les Hospices Cantonaux et l'Etat de Vaud [en 1997]. C'est à la déclinaison de ce nouveau dispositif à l'intérieur de l'organisation des Hospices que nous consacrerons la deuxième partie, en nous focalisant sur la démarche "projets de service" et sur son impact au niveau de la vie des services. Enfin, nous examinerons les résultats de la démarche "projets de service" une année après son introduction, en tenant de dresser un premier bilan à partir de nos propres constats. Nous avons volontairement restreint notre analyse aux services cliniques, et plus particulièrement à celles du Centres Hospitalier Universitaire Vaudois (CHUV). [Auteur]